Vaquero v. Ashley Furniture Indus., Inc.

• Decision Date: 08 June 2016
• Docket Number: No. 13-56606,13-56606
• Citation: 824 F.3d 1150
• Parties: Ricardo Bermudez Vaquero, on behalf of himself and all others similarly situated, Plaintiff–Appellee, v. Ashley Furniture Industries, Inc., A Wisconsin Corporation; Stoneledge Furniture, LLC, a Wisconsin Limited Liability Corporation, Defendants–Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

824 F.3d 1150

Ricardo Bermudez Vaquero, on behalf of himself and all others similarly situated, Plaintiff–Appellee

v.Ashley Furniture Industries, Inc., A Wisconsin Corporation; Stoneledge Furniture, LLC, a Wisconsin Limited Liability Corporation, Defendants–Appellants.

No. 13-56606

United States Court of Appeals, Ninth Circuit.

Submitted May 24, 2016^* Pasadena, California

Filed June 8, 2016

J. Kevin Lilly and Scott M. Lidman, Littler Mendelson, P.C., Los Angeles, California, for Defendants–Appellants.

Michael D. Singer and Jeff Geraci, Cohelan Khoury & Singer, San Diego, California; Kevin T. Barnes and Gregg Lander, Law Offices of Kevin T. Barnes, Los Angeles, California; Raphael Katri, Law Offices of Raphael A. Katri, Beverly Hills, California; Michael Rubin, Altshuler Berzon LLP, San Francisco, California; for Plaintiff–Appellee.

Before: Susan P. Graber and Ronald M. Gould, Circuit Judges, and Wiley Y. Daniel,^*** Senior District Judge.

OPINION

GRABER

, Circuit Judge:

Defendant Stoneledge Furniture, LLC, pays its sales associates only on commission but, it is alleged, requires sales associates to do many tasks that are unrelated to sales. Plaintiff Ricardo Bermudez Vaquero, a former sales associate, asserts that this policy violates California's minimum wage and hour laws. He sued Stoneledge Furniture and its parent company, Defendant Ashley Furniture Industries, Inc., on his own behalf and also moved to represent 605 former and current sales associates as a class. The district court granted class certification under Federal Rule of Civil Procedure 23

. We affirm that decision in this interlocutory appeal.

Stoneledge Furniture is a wholly owned subsidiary of Ashley Furniture Industries. At the time the district court granted class certification, Stoneledge operated 14 retail furniture stores in California and employed about 600 sales associates, who primarily sold furniture and accessories to Stoneledge's customers. Stoneledge paid its sales associates on commission.

Vaquero worked as a sales associate at Stoneledge from 2010 to 2012. He alleges that Stoneledge requires sales associates to perform many tasks unrelated to sales, for example, cleaning the store, attending meetings, and carrying furniture. According to Vaquero, Stoneledge does not pay its sales associates for such work, beyond what they earn in commissions, and this policy violates California wage and hour laws.

Vaquero initially filed this action in state court in California and sought class certification. Under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2)

, Defendants removed the case to federal court, and Vaquero moved to be named a class representative. He asked to represent four subclasses, three of which were derivative of the first: (1) a class of all California sales associates employed from August 24, 2008, to the present who were paid less than minimum wage for non-sales time worked; (2) sales associates who were not provided with itemized wage statements; (3) former sales associates who were not paid all wages due at separation; and (4) sales associates who were subject to unlawful business practices. Vaquero introduced pay plans and policies, along with declarations from putative class members, to serve as representative evidence on liability. If successful on the merits, Vaquero proposed to resolve the damages phase of the litigation through use of a survey, sampling evidence, or a special master.

The district court denied class certification for the third subclass (what it called the “waiting class”), but granted it for the other subclasses. Defendants moved to appeal the district court's decision to certify the remaining subclasses pursuant to Federal Rule of Civil Procedure 23(f)

. We granted permission for the appeal. For purposes of the appeal, both parties have treated the remaining subclasses as a single entity, which they describe, in general terms, the way the first subclass is defined. The sole issue before us on appeal is whether the district court properly granted class certification.

We review for abuse of discretion a district court's class certification ruling. Parra v. Bashas', Inc. , 536 F.3d 975, 977 (9th Cir. 2008)

. In reviewing any particular underlying Rule 23 determination, the standard is also abuse of discretion. Yokoyama v. Midland Nat'l Life Ins. Co. , 594 F.3d 1087, 1091 (9th Cir. 2010).

The district court granted class certification under Rule 23(b)(3)

. To justify certification under that provision, a plaintiff must prove that the class meets all prerequisites under Rule 23(a)¹ and that the class meets two requirements under Rule 23(b)(3).² Defendants argue that Vaquero has failed to prove commonality, as required by Rule 23(a), and predominance of class claims, as required by Rule 23(b)(3). Defendants also assert that class certification has altered the parties' substantive rights in violation of the Rules Enabling Act, 28 U.S.C. § 2072(b).

A. Commonality

Rule 23(a)(2)

provides that a plaintiff may sue as a representative member of a class only if “there are questions of law or fact common to the class.” The requirement of “commonality” means that the class members' claims “must depend upon a common contention” and that the “common contention, moreover, must be of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal–Mart Stores, Inc. v. Dukes , 564 U.S. 338, 350, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011).

The Supreme Court's most thorough interpretation of the commonality requirement is Dukes

, and Defendants rely on that case to argue that commonality does not exist here. In Dukes, the Supreme Court denied certification of a class of more than a million members—female employees of the corporation—who claimed that the retailer's delegation of promotion decisions to individual managers, in combination with its corporate culture, denied them equal pay and promotional opportunities in violation of Title VII. Id. at 367, 131 S.Ct. 2541

. The Court held that the plaintiffs “wish to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members' claims for relief will produce a common answer to the crucial question why was I disfavored .” Id. at 352, 131 S.Ct. 2541. In that case, subjective decisions by many managers in different locations could not be considered a common injury across a class of more than one million plaintiffs. Id. Therefore, the plaintiffs failed to make the prerequisite showing of commonality required by Rule 23(a). Id.

Here, by contrast, the common injury is far less extensive, far less abstract, far less dispersed, and far more objective and focused. California law proscribes compensation through commission for work that is not “directly involved in selling.” Ramirez v. Yosemite Water Co. , 20 Cal.4th 785, 85 Cal.Rptr.2d 844, 978 P.2d 2, 10 (1999)

(internal quotation marks omitted). California law also prohibits “averaging” to meet minimum wage requirements. Armenta v. Osmose, Inc. , 135 Cal.App.4th 314, 37 Cal.Rptr.3d 460, 468 (2005). Stoneledge paid sales associates only through commissions. If the company required sales associates to do work not “directly involved in selling” and failed to compensate the sales associates for such work, then it violated California's minimum wage laws for all such employees. Thus, the complaint contains a “common contention” that easily “is capable of classwide resolution”: it is one type of injury allegedly inflicted by one actor in violation of one legal norm against a relatively small number of class members who all generally performed the same work. Dukes , 564 U.S. at 350, 131 S.Ct. 2541. The district court permissibly concluded that Vaquero had pleaded a common injury capable of class-wide resolution.

B. Predominance

Under Rule 23(b)(3)

, a class may be certified only if “questions of law or fact common to class members predominate over any questions affecting only individual members.” The Supreme Court has noted that, “[i]f anything, Rule 23(b)(3)'s predominance criterion is even more demanding than Rule 23(a).” Comcast Corp. v. Behrend , ––– U.S. ––––, 133 S.Ct. 1426, 1432, 185 L.Ed.2d 515 (2013).

Defendants argue that, when damages calculations cannot be performed on a class-wide basis, predominance has not been reached. Defendants maintain that the Supreme Court's holding in Comcast

controls. There, in an antitrust case, the Court reviewed the certification of a class of consumers. Id. The plaintiffs offered a complex damages model to show how the customers were subject to anti-competitive prices. Id. at 1432–33. The Court reversed the class certification because the model “failed to measure damages resulting from the particular antitrust injury on which petitioners' liability in this action is premised.” Id. at 1433.

We have interpreted Comcast

to mean that “plaintiffs must be able to show that their damages stemmed from the defendant's actions that created the legal liability.” Pulaski & Middleman, LLC v. Google, Inc. , 802 F.3d 979, 987–88 (9th Cir. 2015) (quoting Leyva v. Medline Indus., Inc. , 716 F.3d 510, 514 (9th Cir. 2013) ), cert.

den

ied , ––– U.S. ––––, 136 S.Ct. 2410, 195 L.Ed.2d 780, 84 U.S.L.W. 3500 (U.S. Mar. 1, 2016) (No. 15-1101 ). If the plaintiffs cannot prove that damages resulted from the defendant's conduct, then the plaintiffs cannot establish predominance. Id.

No such problem exists in this case. Vaquero alleges that Defendants' consciously chosen compensation policy deprived the class members of earnings in violation of California's minimum wage laws. In a wage and hour case, unlike in an antitrust class action, the employer-defendant's actions necessarily caused the class members' injury. Defendants either paid or did...